Granny flat construction whilst property is leased

Be careful you are not holding all the cards.
If you play hardball, the owner will just delay the whole construction process by 2 months (mid-september) and give you an eviction notice citing construction, and simply find an amenable tenant with suitable wording in lease.
As @Biz has stated, you knew what was coming so it is in everyone's interest that you negotiate a mutually acceptable resolution.

 

@Biz Yes, we were notified it was going to happen, but we were assured there would be no impact on our off-street parking spaces agreed upon in the lease, and there was never any mention of power or water use from our premises. How could we have possibly known what to expect? Not to mention the way they have gone about it. We had to move our vehicles out of the way late Sunday afternoon so they could get a backhoe in there, and this visit was completely unannounced. The tenancy laws need to be obeyed by both parties. We're holding up our end of the agreement, he isn't.

@Skilled_Migrant I would have no problem with that outcome. Not a chance we will be renewing this lease after what has already transpired. There are other issues in the past that have also not been addressed, such as significant roof leaks during heavy rain. We have a home under construction atm, with completion due around the same time as the end of lease, so we'll be gone soon enough regardless.

Even if he was to do this, what tenant is going to sign up and pay full rent on the property with ongoing construction? He will have to reduce the rent to get someone in. I can assure you, the quality of the existing residence certainly won't be enticing anyone in. Is it really worth the cost of having no tenants for a number of weeks, plus re-letting costs? I highly doubt it. I have no doubt we would be within our rights to move out immediately without penalty due to breach of the lease agreement, but it is not in either parties best interest to do so, so yes a mutually acceptable resolution is what we are seeking.

 

@Joynz Compensation was mentioned by the agent when the lease was initially signed, but as there was no timeframe for work to begin, it was simply 'we'll figure it out when we get to it'.

 

Sounds like you are holding all the cards. If I was in that position (and knowing I had no intention to renew the lease) I would be asking for at least a 50% discount (if they are expecting to use power and water) or tell them to halt construction immediately.

And the reduction should be for the remainder of the lease period (not just during construction) given it sounds like you are losing part of your backyard.

Maybe you can negotiate with the landlord to pay you a lump sum to move out early if you intend to leave anyway. Win/win?

Good luck.